And Now, A Look Even Further Ahead: Part II

To briefly recap from last time, the production side of the wine industry is better than ever, more people have the tools and the knowledge to make the best wines ever.  There are very few ‘bad’ wines these days that suffer from bacterial, microbial, or other forms of ‘funk’ that hygienic winemaking has mostly eliminated.  The most significant source of bad bottles stem from the closures, either those with TCA that cause the wine to be corked, or an imperfect seal that allows the wine to oxidize.

Screw cap closures virtually eliminate all of those problems, and the next generation is not as connected to the ‘screw caps mean cheap wines’ mentality.  Millennials grew up with fine wines that came with screw caps and there’s no reason to think the acceptance of screw caps will not continue to increase moving forward to the point where most of the wines that are consumed ‘off-the-shelf’ will come in cap closures, allowing the cork trees to replenish to make better corks for those ‘special’ bottles destined for the cellar.

One must ask a simple question here before moving on.  Presumably the wine industry will cater to the market (though it is known to try and manipulate certain aspects) as time marches on.  But what exactly is the market?  Is it the small upper part that maintains cellars and buys wine on a regular basis, usually with the curiosity to try new genres just because they want to and the itch to keep up on trends?  The small, savvy group is the one we maintain has the most impact on the market and spends the most money proportionately.  The trends often start here.

Is it the second tier that is willing to spend money on high priced wine clubs and restaurant markups with just enough knowledge to know they want something better?  These are professional folks that have the money to spend but not necessarily the experience or desire to sort through the rhetoric.  They are more susceptible to price (more expensive is better, right?) and marketing (‘being in a wine club makes me a special insider’) impressions.  There’s a mediocre, single vineyard $60 Petit Verdot Reserve out there somewhere for these folks but they do make up a sizeable buying force.  Certain market brands (not mentioning names) have established remarkable followings with this largely loyal group.  This is the ideal target for most wineries and direct-to-consumer entities. Some will take the step to the smaller group, others will become disenchanted with the lack of value, but the remainder is still a sizeable group with buying power.

The third group is the largest in population though probably far less connected.  These are the more occasional buyer that purchases wines pretty much the same way they buy potato chips and soda.  They find a brand they like and stick with it unlike shaken out of the pattern.  Of course they make up the largest group in terms of tonnage and are the targets.  For the most part these are the folks that like wine but aren’t fanatics about it.  They will see things when they filter down to the grocery/’big box’ level, and won’t see or seek out many opportunities to try something different.   These are the ‘brand buyers’ that corporate wineries seek.

We aren’t casting judgment from our perspective, just observing.  At this point we have described these groups from a multigenerational context.  In truth the big change in wine perception came with the baby-boomers, arguably the first American generation to have some sort of wider-spread wine culture.  It was rare to see people ordering wine in restaurants or bars as an aperitif or cocktail back in the day.  But it is pretty common now and the next generation, the millennials, grew up with this around them.  Most ‘boomers’ are now in their 60s and 70s and aren’t buying a lot any more.  The industry looks to the next-gen buyers to try and figure it out.

“It was rare to see people ordering wine in restaurants or bars as an aperitif or cocktail back in the day.”

It’s a little hard to cover all the bases, and our perspective is certainly a bit skewed as we deal largely with the savviest group.  But there are a few things we have noticed over the last few years.  The media has changed buying patterns.  We hardly ever hear the term ‘vertical’ from a buyer any more.  For those that don’t know the term, a lot of folks would find a few wines they liked and buy some every year, year in and year out.  These days a buyer will be more sensitive to reviews on high end wines and cluster buy the highest rated vintages and top wines from the media.  He is more attuned to score than brand if push comes to shove.

Back in the olden days, brands established themselves more slowly but on a much more solid footing.  In today’s lightening communication world, wines and labels can get hot overnight and disappear almost as fast.  In the ‘148 character’, digital world where a lot of folks don’t ever look up from their phones, slow building would seem to be at a disadvantage.  It’s hard to get someone’s attention long enough to tell much of a story (unless you have them trapped in your winery tasting room).

Most of the wine purchased is drunk right away, though that isn’t necessarily a massive societal change.  It is however on a bit of an upswing.  The next-gens seem to be more inclined to meet outside the home, which kind of precludes the whole cellar building process.  We would suggest that this trend has supported the explosion of casual restaurants, ethnic eateries, and ‘pub-like’ venues over ‘fine dining’ (that itself is a very fertile subject for another time).  Suffice it to say that those are less likely to provide that ‘revelation’ moment wine-wise, and support the more casual buying of wine.

On the production end, things are technically much better as we said.  But the combination of the media formats favoring blowsier, more overt styles and the general public’s waning attention span (air a wine for a half hour?…omg, lol what am I supposed to do in the meantime?), favors the sweeter, more commercial, more obvious style of wine.  Sadly for the big picture, we see wine, like the world, becoming more homogenized.  Busy people don’t have time for details, so simple and non-obtrusive has a ready market.

Another key issue is how wines are sold (we’ll address this detail next time).  There are more exceptional wines than ever as we said in our last piece.  So let’s take our next-gen buyer, the people that the industry will have to rely on for the next 20-30 years, and let’s make a couple of big suppositions.  Let’s assume that a couple a next-geners were at lunch and ordered a glass of wine and actually paid attention to it for a moment.  Now this presumes a lot of other things, like the wine they got poured was actually opened within the last 24 (or 48?) hours and the batteries on their smart phones, tablets and smart watches all ran out at once and they left their wireless charging devices at home.

That a pretty unlikely convergence of events but for the sake of theory let’s move on.  Under these extreme circumstances, let’s say they find they really like what they were drinking.  Suddenly, through no fault of their own, they have the ‘aha’ moment (like we all had at one point or another) and decide maybe they’d like to pursue the wine thing a little bit.

Where are they going to do that?  How are they going of do that?  Where’s the next generation, the generation that will be expected to support the wine industry, going to learn about wine?  That probably is the biggest question because, as much as the wine industry loves to tell itself otherwise, the world has changed a lot since the baby boomers turned 21.  But that’s too big a question for right now.  We’ll take a swing at it in a couple of weeks…

2017: Good Things on the Horizon

This has become a tradition for us to give everyone an outline of what to expect out of the coming year.  Part of the reasoning is that we have the information because we rely upon this info as part of our yearly business plan seeing as there’s always a limit to the amount of money one can spend (even, of course, for the U.S. Government who can simply print it).  Since we have already done the homework, there’s no reason not to share it with you so you have the option of strategizing your own purchases and consider cellaring options.

Some years there is a lot going on, other years less so.  Last year (2016) had a few strong categories and a few big categories that were not so strong performance-wise.  We dare say 2017 has the possibility of being one of the best years for wine buyers in half a decade.  We say that without considering an improved economy which some are predicting.  We are merely talking about the quality and breadth of really good stuff we anticipate should hit the market.

While the domestic market is not near as volatile from a vintage perspective as Europe, particularly in California, the top domestic regions all seem to be on a continuing ’roll’.   California, Oregon and Washington will be mainly rolling out 2014s and 2015s, which are surprisingly uniform in quality, appealing and, from what we’ve seen from 2014, quite accessible.

Domestic quality is such that there should be a trickle down into the next level of players and even the ‘bargain’ producers should be able to find good juice to work with (provided they can find any juice).  That’s the one caveat… quantity.  It is low in certain areas, particularly in 2015, a consistent theme with most of the California producers we’ve spoken with.  What that means to you is that, if you see something that strikes your fancy (particularly among those 2015s), you should move in some haste as they may not be around long if they get any critical attention at all.

The big news of course is the ‘foreign’ 2015s.  The vintage promises to be a watershed for quality wines.  We haven’t seen this much uniform success across borders since 2010, and can only think of a few other times (1985, 1990, 2005) where so many folks from virtually anyplace that grew grapes had a smile on their face.

“The good times are going to roll.”

The good times are going to roll.  As northern Italy gets through the remainder of their rain-affected 2014 whites, they will be (and are being) replaced by the sensational 2015s.  We haven’t had anything this good since 2010, though the more fruit-driven profile is more specific to 2015.  Very tasty.  We have been pleased with some of the whites from the Rhone as well, but will admit that the 2015 whites from Burgundy, while quite good, are a little riper and lower in acidity that the outstanding 2014s.  They will however make for an excellent bridge for fans of domestic Chardonnays who are used to ‘fatter’ wines.  Buy up those 2015 Loire Valley whites as they arrive and the Cabernet Franc-based reds in particular appear to be the finest since the 2005s.

We have already talked at length about the 2015 Germans and Austrians which are both very special vintages.  For whatever reason, the media has not given these wines their due as yet (if they ever will…it’s a Cabernet and Bordeaux world…still).  This has afforded a longer buying window, which is not necessarily a bad thing, and we continue to tell anyone who will listen that this is a vintage of historic quality in both regions.

Bordeaux has the opportunity to really make a comeback, provided that they don’t lose sight of reason when it comes to prices.  The 2014s are delicious and should provide some really appealing earlier drinking, the 2015s are definitely vins de garde, and the 2016s, which should be offered as ‘futures’ this spring, are rumored to be spectacular in certain areas (clay soils, old vines) that were able to handle the unprecedented drought that hit the region.  Good times for Bordeaux lovers, particularly if the euro stays on the low side (the euro was around $1.35 back when the 2010s came out, it’s now around $1.05).

Sadly, the euro probably isn’t going to be much help in Burgundy because the highly anticipated 2015 vintage was also short on quantities (and because it’s Burgundy).  But the little red Burgundies we have tasted so far have been remarkably appealing as a group, which only means good things for the ‘bigger dogs’.  It’s definitely a vintage to keep an eye on the entry-level Bourgognes, well priced village bottlings, and places like the Cote Chalonnaise and Marsannnay as well as Beaujolais.  If you are super ‘brand conscious’, acquiring certain labels might be frustrating, but we anticipate there will be some opportunities if you love the genre and are looking for some very tasty juice.

There will be lots of ample southern Rhones and seriously good northern Rhones.  We suspect the 2015 Chateauneufs will require some attention as there hasn’t been a vintage this good since 2010.   As to the ‘top notch’ Cote Roties and Hermitages, etc., quality will be ‘amaze-balls’, but a lot of the small, famous names will be hens teeth when it comes to sourcing.

The great thing about 2015 reds is that they are generally gregarious and outgoing.  We have seen that all over France and in the ‘little’ reds from northern Italy.  If you can’t find something delicious, you’re not trying.  There will be those that will say that, because of their outgoing fruit, these wines aren’t structured enough to be considered ‘serious’.  They are ‘fat’, true, but also fresh, which bodes well for development.  We have tasted enough ‘super jammy’ vintages that have been declared ‘great’ that haven’t necessarily aged as well or as uniformly as some experts said they would.  Besides, what’s wrong with being pretty and precocious?

We expect South America will continue to be one of the biggest surprises.  We keep finding really compelling start-ups and producers previously unknown to us that have raised the bar considerably.  We said they same thing last year about Argentina and Chile, which at the time, probably raised a few eyebrows.  In fact, we ran across a lot of stuff that exceeded even our expectations and have to presume that there is a lot more to be found.  What is perhaps even more telling is that some of the labels that have been around a while have upped their games as well (just today a Malbec from Bodega Neomia showed a touch and fruit component that got us excited…we don’t recall something of this fineness from this source in the past).

Finally, our ‘dark horse’ prediction for 2017 is…South Africa.  Now we have been trying to create a niche for South African wines since the 90s.  The wines were often parochial, sometimes solid, and occasionally breakthroughs.  But sustainability of the genre proved to be elusive.  As soon as we stopped promoting them, they seemed to have little carry through on their own.  We have happened upon a few interesting, some maybe a little quirky but delicious items that indicate there is another tier of innovative South African small producers that we have not seen in this marketplace.

By ‘dark horse’ we kind of mean these South African boutiques haven’t had, nor do we expect that they will get much media exposure, and there are all kinds of marketing and distribution issues with small importers and unknown genres by definition.  In other words, we aren’t going to bet the grocery money on their success, but only because market mechanics kind of work against them.  The wines we are talking about got us really pumped, and we have to assume there are some others out there like them.  These wines definitely deserve an audience.

This promises to be a very exciting year for wine drinkers.  Besides all that we have alluded to thus far, there are still remnants of the 2010 Reserva and Gran Reserva Riojas from Spain to be had, and Italian reds will certainly have their share of successes (2013 Tuscans, 2015 Barbera and Dolcettos, 2015 ‘little’ Chianti Classico wines) on an individual basis. The only question we can’t answer yet is if this will be Australia’s time to recapture the market share they deserve, that will be up the consumer as the wines are better than ever.  We’ll also be on the lookout (and hoping) for ‘deals’ on the delicious 2014s from the southern Rhone and Burgundy, a vintage that got largely overlooked as buyers focused ahead on the more ‘newsworthy’ 2015s.  At reduced prices, we will be all over those wines.

Are we looking forward to 2017?  You bet!  Happy New Year…